🇬🇧 GBP – The Bank of England was in focus yesterday as the monetary policy committee decided to keep the current interest rate and level of quantitative easing on hold. However, the Governor Mark Carney went on to say that the current growth momentum in the UK would warrant a faster more frequent pace rate hikes in the UK. He went on to add that the central bank expects to see wages to outpace inflation in 2018, with inflation remaining above the 2% target. All of which helped the pound surge in the afternoon before retracing somewhat before the end of the UK session.

Today, we have industrial and manufacturing production and a GDP estimate due from the UK in an otherwise quiet day. Markets may keep the pound buoyed with the BOE news yesterday, but any negative results could see much of yesterday’s ground being lost.

🇪🇺 EUR – The ECB monthly bulletin yesterday noted that the ongoing broad and solid economic expansion is expected to continue beyond the near term, though this had little impact on the rate. The Euro remains pressured against the dollar this week as the greenback benefited from safe haven inflow due to sharp volatility in the equity markets.

Today there are no data releases of note for the Eurozone.

🇺🇸 USD – Volatility in the US equity market continues to remain the main focus in what was an otherwise quiet day on the data front in the US. The weekly jobs figures were all but ignored as markets still look to favour the dollar in a flight to safety, helping the dollar pull back earlier losses against the pound following the Bank of England rate announcement.

Summary: The pound surged after Bank of England Governor Mark Carney suggested an interest rate hike would be due sooner than previously expected. Markets piled into Sterling and the pound surged against most of its counterparts after the midday news. However, this momentum slowed through the afternoon as much of the ground was lost and the pound ended almost where it started the day. Equity market volatility remains the focus now as Dow fell again yesterday and investors remain pressured to shift to the safe haven of the US dollar.

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